If the opportunity costs of producing a good increase as more of that good is produced, the economy's production possibility frontier will be
A. a negatively sloped straight line.
B. negatively sloped and "bowed inward" toward the origin.
C. negatively sloped and "bowed outward" from the origin.
D. a positively sloped straight line.
Answer: C
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Why will a private market be unable to produce the efficient quantity of public goods?
A) because the good's marginal cost is too low B) because the good is nonexcludable, so there is the free rider problem C) because the good is rival, so no one will want to pay the producer for it D) All of the above answers are correct.
Subtracting borrowed reserves from the monetary base obtains
A) reserves. B) high-powered money. C) the nonborrowed monetary base. D) the borrowed monetary base.
Each year the government makes interest payments to people who own part of the public debt. The debt is in the form of
a. Federal Reserve Notes b. Treasury bills, notes, and bonds c. stocks and bonds d. FDIC notes e. private securities
Stockholders of ComfortAir Corporation, an air conditioner and furnace manufacturer, are concerned that the companies executives may take on greater risks than stockholders desire. This example illustrates
a. moral hazard and market risk. b. moral hazard and firm specific risk. c. adverse selection and market risk. d. adverse selection and firm specific risk.